New REIQ Contracts

New Editions of REIQ Contracts

On 20 January 2022, new editions of the Contract for Houses and Residential Land and Contract for Residential Lots in a Community Title Scheme were released.

These new editions contain several changes, with the most significant updates outlined below:-

Right to Extend Settlement Date

Under the new editions of the contracts, either party may now give notice extending the Settlement Date by up to 5 business days. Notice must be given before 4.00pm on the Settlement Date, and more than one notice may be given extending the Settlement Date (provided the new nominated Settlement Date is not later than 5 business days after the original agreed Settlement Date).

While this change has been brought in to deal with the difficulties parties often experience with their financier/mortgagee regarding settlement delays, either party may give notice extending the Settlement Date without such grounds.

Compliant Smoke Alarms

From 1 January 2022, sellers have new obligations regarding smoke alarms in accordance with the Fire and Emergency Services Act 1990 and the Building Fire Safety Regulation 2008.

If a Seller does not ensure the smoke alarms in the property being sold are compliant, the Buyer will be entitled under the Contract to an adjustment at settlement of 0.15% of the Purchase Price.

Buyers will not be entitled to terminate or claim damages, and will need to ensure they install compliant smoke alarms after settlement.

Deposit by Electronic Transfer

If a Buyer:

  • pays the deposit under the Contract by electronic transaction;
  • provides written evidence of payment to the Deposit Holder; and
  • does not take any action to defer the payment,

payment will be taken to have been received on the day of the electronic transaction.

However, a Seller may give notice that the Deposit has not been received by the due date under the Contract and require payment to be received by 5.00pm two business days from such notice. If the deposit is not received by the Deposit Holder in accordance with the notice, then the Buyer will be in default.

Services Unrelated to the Land

Under the new editions of the contracts, if a Seller does not disclose services through the Property which do not service the Property:

  1. if material, the Buyer may terminate the Contract prior to settlement, or elect to proceed to settlement and claim compensation on or before settlement; or
  2. if immaterial, the Buyer may claim compensation on or before settlement.

Services can include things such as gas, electricity, water and sewerage.

Additional Changes

As noted above, there are numerous changes made in the new editions of the contracts. In addition to the changes outlined above, the new edition contracts now also provide for the following:-

  • Pool Safety Compliance – the Seller must provide to the Buyer at settlement a current Pool Safety Certificate, unless the Seller has given a Notice of No Pool Safety Certificate before the Contract was entered into.
  • Contract Date – a new definition has been inserted for ‘Contract Date’ to allow for signing electronically.
  • Seller Warranties – Sellers need to disclose communications from authorities regarding work to be done to the property and notices that may lead to the issue of an enforcement notice.
  • Notices to do Work – if the Seller discloses a notice to do work to the Buyer in writing before the Buyer signs the Contract or in the Contract itself, the Buyer will be responsible for complying with the notice.

The information in this article is general information only. If you require advice or assistance with a sale or purchase of property, contact the experienced team at Miller Sockhill Lawyers on 07 5444 4750.